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6F ROSEVILLE. MINNESOTA NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1978 Note 1- Summary of Significant Accounting Policies (Continued} . Property and equipment - The property and equipment of the proprietary funds are ' stated at cost. Depreciation has been provided using Che straight-li.ne method over the estimated useful lives of the assets. Depreciation on property and equipment '�.. financed from contributions is cedistributed to reduce the respective contribution. General Fixed Assets - General Fixed Assets purchased are recorded as expense in funds other than proprietary funds at time of purchase. Such assets are capital.ized ' at cost in the general fixed asset group of accounts. Ne depreciation has been provided on general fixed assets because depreciation as such does not constitute a current budgetary expenditure. General Long�term Debt - The general long-term liabilities, except for proprietary and special assessment funds, are not carried as a liability of a fund but rather are set up in a separa[e self-balanci.ng group of accounts known as the "general � long-term debt group o.f accounts." . Budget - A plan of financial operation is set forth in the annual.budget adopted by the City Council. The amounts shown in the financial statements represent the � original budgeted amount and all revisions made during the year. Note 2- Metropolitan Waste Control Commission �� The deferred credit and corresponding receivable of the Seioer Fund from the '�, Metropolitan Waste Control Commission represents the City's share of equity in� !� the City's sewer system which was acquired by the Commission Sanuary 1, 1971. This receivable will be paid to the City by issuing credits, annually through 1999, against future sewer billings from the Sommission.. These credits will be reflected ; in the statement of income as received. Note 3 - Retirement Plans The City participates in a state�wide contributory pension plan under the Public Employees' Retirement Association, Minnesota Statutes Chapter 353, which covers all employees except temporary and seasonal employees. The City's contribution for pension costs, under the state-wide plaa, coas $185,321 for the year ended December 31, 1978. Under existing Minnesota law, the City has no future contingent obligations or commitments to the plan or its participants except to make continuing contributions as determined from time to time by the State Legislature. Note 4- Vacation and Sick Pay The City compensates all employees upon termination for unused vacation. The . er,pense for vacation pay is recognized when payment is made.: The accumulaLed liability for unpaid vacation benefits on December 31, 1978 was approximately $127,600. City emgloyees are entitled to accrue sick leave for each calendar month af full- time service. Employees are not compensated for unused sick leave upon termination of employment,except upon retirement, at �ohicn time employees are entitled to one- .: